What the US Military Doesn’t Want you to Know

Fact -- The United States Department of Defense is the single biggest consumer of petroleum in the America and the single largest oil consuming division of government anywhere in the world.

As a matter of fact, back in 1999, the U.S. Defense Energy Support Center (DESC) -- the branch of government that buys fuel for the Defense Department -- purchased more light refined petroleum products for the military, than any other single organization or country in the world.

Now, it really comes as no big surprise to me that this is something that the military doesn't necessarily want to broadcast. Why's that? Well, in truth, it's difficult to hear how much oil is consumed by the DoD each year and not be shocked.

Unfortunately for the DoD, they are required to report all spending to the public including any money spent on petroleum products. However, they don't have to make it easy to find. And believe they don't. I spent a good three hours the other day trying to find purchasing and consumption figures from the U.S. military.

The best place to find these figures is on the DESC website. But this website isn't exactly 'user-friendly'. In fact, with both hands tied behind her back, Helen Keller could have found her way through a garden maze easier that someone can navigate the DESC site. The entire site is loaded with confusing governmental jargon, dead ends, and links that take you away from the DESC home site. But after several eye-straining hours I finally found what I was looking for -- the DESC Fact Book FY 2005.

So what exactly did I find out? Get this -- According to the DESC, the Defense Department consumed over 130 million barrels of oil just last year!

Obviously that's a jaw-dropping amount of oil. But that number has actually decreased over previous years. Over the past three years the DESC has bought over 400 million barrels of oil for the DoD at a cost of over $20 Billion.

Refiners produce 19.5 gallons of gasoline from every barrel of oil. So, the 400 million barrels consumed by the DoD over the past three years is equal to about 7.8 Billion gallons of gasoline! Yeah, you read that right -- the DoD has burned over 7.8 Billion gallons of gasoline in three years.

How far could you drive your car with that much petro?

Far -- Real far. 7.8 billion gallons of gasoline is enough fuel for the average car -- getting 25 miles per gallon -- to drive completely around the circumference of the earth 7,830,838 times! That's also enough fuel to make over 2,000 round-trip journeys to the sun and back. (By the way…before you pack your bags, you should know that if you drove non-stop at 60mph, it would take you over 370,000 years to complete either of these voyages.)

The DoD uses nearly 2% of America's total transportation fuel annually -- close to 400,000 barrels per day. To put that in perspective: That's the same daily oil consumption as the entire country of Greece. In fact, if the Department of Defense was a country, it would be the 31st largest consumer of oil in the world!

As startling as these facts are, they really come as no surprise considering the types of vehicles used by the U.S. military. Not long ago we talked about the F-16's fuel consumption. If you recall, when the fighter jet fires up its afterburners, its engines burn a mind-blowing 28 gallons of jet fuel per minute. The F-16 is just one of the military's gas guzzling toys.

A pair of Apache helicopter battalions, as another example, can devour more than 60,000 gallons of fuel in a single night's attack. Another example -- the Abrams Tank, which weighs 68 tons, is a true gas guzzler. This monstrosity only gets about a half mile to a gallon. And you thought your Navigator had poor gas mileage. The F16, the Apache, and the Abrams are just three of the endless supply of aircraft, ground vehicles and ships the U.S. military has, and uses, at their disposal.

Of course in times of conflict the DoD requires more fuel.

The U.S. Army calculated that it would need to use 40 million gallons of fuel in just three weeks of combat in Iraq. When we start talking about gallons of fuel in the billions, 40 million doesn't sound like all that much. But consider this: The total amount of gasoline consumed by all the allied armies combined during the four years of World War I was only 40 million! And today the U.S. military uses that much in a matter of weeks

The U.S. military estimates that it uses about 30% more oil during times of war than during times of peace. So what does that mean for investors? Well, during times of war you don't necessarily have to own security stocks to make money. You can just as easily make profits with energy stocks. The money and demand are almost guaranteed.

So, I want you to keep all this in mind just in case the U.S. decides that they've had enough antics out of Iran or North Korea and invades either country. While other investors scramble to buy defense and security stocks, you might be able to get a nice deal on a few oil and gas stocks.